NEW YORK (TheStreet) -- In the past four years, I've interviewed more than 50 self-made billionaires, Nobel Prize winners, investment titans, bestselling authors, professors, and financial legends. My goal was to find a way for individual investors to take control of their money in a system that seems rigged against them.
It was the ultimate Ph.D. in investing, where my "professors" weren't professors at all, but practitioners who move markets and shape the world economy, like Ray Dalio, Warren Buffett, Paul Tudor Jones and Mary Erdoes. I've gathered what I learned into my first book in 20 years, MONEY Master the Game: 7 Simple Steps to Financial Freedom.
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I asked each of these great investors, "If you couldn't pass any of your money to your children, but only a set of insights, strategies, or a portfolio, what would they be?"
Click through to see the answers from four of the most brilliant minds in finance.
Ray Dalio, Founder and Co-Chief Investment Officer, Bridgewater Associates
One of the experts I was fortunate enough to interview was Ray Dalio, founder of the largest hedge fund on the planet, Bridgewater Associates, with $160 billion in assets under management.
His Pure Alpha Fund has lost money only three times in 20 years, according to Barron's. Over the life of the fund (since launching in 1991), he's produced a 21% compounded annual return (before fees). If there's anyone I wanted to ask, "Can the average investor still make money in this crazy, volatile market?" it was Ray. So when he told me, "There's no question you can still win," I was all ears.
"When looking back through history, there is one thing we can see with absolute certainty: every investment has an ideal environment in which it flourishes. In other words, there's a season for everything. I know that there are good and bad environments for all asset classes. And I know that in one's lifetime, there will be a ruinous environment for one of those asset classes. That's been true throughout history.
"I imagine four portfolios, each with an equal amount of risk in them. That means I would not have an exposure to any particular environment.
"First, we need 30% in stocks.Then you need long-term government bonds. 15% in intermediate term (7- to 10-year Treasuries) and 40% in long-term bonds [20- to 25-year Treasuries]. Rounded out the portfolio with 7.5% in gold and 7.5% in commodities.
"You need to have a piece of that portfolio that will do well with accelerated inflation so you would want a percentage in gold and commodities. These have high volatility. Because there are environments where rapid inflation can hurt both stocks and bonds."